Canadian Recording Industry Demands 45% Of Revenue; Then Blames 'Pirates' For No Streaming Music Services

from the wow dept

Ah, the recording industry. We've already discussed how ridiculously complex it is for a music startup to obtain the licenses it needs. Combine that with the ridiculously high rates demanded by the record labels and the fact that they demand licensing for things that shouldn't need additional licenses, and you understand why it's so difficult for music startups to survive, and why the market is so fragmented.

You hear it all the time. Spotify isn't available in the US. Pandora isn't available outside the US. And so on. Name the startup and there are serious restrictions on it. Things in Canada are pretty bad, where they basically don't have any of these music services, and it's because the Canadian recording industry is apparently demanding absolutely, positively insane fees -- such as 45% of gross revenue. Yes, gross revenues. If you know anything about the finances of these kinds of businesses, that's laughable. As Pandora's Tim Westergren notes, Canadian radio stations pay approximately 2.1% of gross revenue to the recording industry.

As I read the article, what struck me about it is that, for all the complaints about how Canada was supposed to be some evil "pirate haven," here was a clear case of how its ridiculous copyright situation was keeping new music services out. If copyright were really so weak in Canada, you wouldn't have this issue at all. And then I got to the end of the article, where the Canadian Recording Industry Association boss, Graham Henderson, made the following guffaw-inducing statement:

The music industry, meanwhile, says its fees are not the problem. It says music-related businesses are reluctant to enter Canada because of the country's reputation as a file-sharing haven where music fans can download songs illicitly without fear of penalty.

"Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?" said Graham Henderson, president of the Canadian Recording Industry Association, which represents major record labels.

"[Canadians] just seem to have no appetite for a legal marketplace."

This comes after 26 paragraphs discussing all the different music services that want to enter the Canadian market, but can't because of the ridiculous rates that the recording industry wants to charge. It always shocks me that folks like Henderson can make such blatantly false statements like this and people don't call him on it. He gets away with it because no one points out that his statements make no sense.

He's telling the truth

"Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?" said Graham Henderson, president of the Canadian Recording Industry Association, which represents major record labels.

He's not talking about pirates - he's talking about the Canadian recording industry, taking 45% of gross revenue without doing anything to deserve it. The Canadian recording industry is made up of Canadians, right?

It always shocks me that folks like Henderson can make such blatantly false statements like this and people don't call him on it. He gets away with it because no one points out that his statements make no sense.

...ladies and gentlemen of this supposed jury, I have one final thing I want you to consider. Ladies and gentlemen, this is Chewbacca. Chewbacca is a Wookiee from the planet Kashyyyk. But Chewbacca lives on the planet Endor. Now think about it; that does not make sense!

Really? It makes no sense?

The sad thing is this parody is becoming more and more life-like all the time. If things go on the way they have the lawyers might as well be using the Chewbacca defense as a real legal doctrine for all the average person will care. People see unjust laws as obstacles to be overcome, not standards to uphold..

Re: Good point

This is a good point. I thought the Canadians had some sort of "just in case" tax that is paid to the recording industry.

So every blank CD has an added tax, "just in case" someone copies something they shouldn't. I suppose that tax is moving to flash drives and mp3 players next.

If you are already paying for illegal downloads through a special tax, seems that the logical thought is... "If I'm being taxed for an illegal act that I didn't commit, I might as well commit the illegal act since I'm paying for it anyway."

Re: Re: Good point

we have a similar levy on our blank media, in The Netherlands.
But it's not to fund the illegal downloads, but to offset the "costs" of copying your discs, which they then try to make impossible with DRM crap.

Music Industry NOT asking for 45%

Please note that the music industry in Canada is NOT asking for 45% of gross revenue. That just the part of the recording industry dealing with record companies and artists. Songwriters and music publishers (SOCAN) also want money and that amount was not listed. However, given that the record companies want 45% I wouldn't be surprised if SOCAN also wants a similar amount.

Re: Music Industry NOT asking for 45%

If Big Content is allowed to make up $#@! about downloaders and lump all bittorrent use with copyright infringement, then we should be allowed to conflate all these extortionists together as well. They're all in the same gang...

If they were serious about artists rights which the labels aren't they'd simply make the terms more sane as in 10-15 years and then they could garner more support for an ACTA like treaty.
BUT when the terms out way the majority of a life span of a human why does society continue to grant them this right just cause they re BRIBING politicians.

WHAT should be going on is a list of every politician world wide that has take bribe money form hollywood types and the music industry.

WAIT A MINUTE

in his little ramble does he actually refer to any Canadian as being a pirate ( by definition a person who robs and pillages ) , as we have a levy that they get. IF so i would call this a definite class actionable slander and defamation of character on a nation scale, to which everyone in Canada could be party too.

AND more slander and defamation of character

by implying that because i use a levy i want a "illegal service" that would say that i am in and of myself wanting to break laws which again could be interpreted as slenderizing a perfectly legal practice set forth that they originally asked for.

"Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?"

Excuse me ? YOU saying i'm stealing it? Thieving it pirating it? I pay my levy on cdrs. I want an apology on behalf of my nation for this buffoon you Americans pushed on us.

If I were canadian....

Thank you Mr. Masnick

Great article. At this point Canada's biggest problem is misinformation spread by people like this, who clearly are among the few to benefit from the existing travesty of a copyright system.

Canada already has ridiculously strong copyright lawm and more copyright collectives than you can shake a stick at. Our government's attempt at rushing through the Canadian DMCA (aka Bill C-32) to modernize us right into the last century will certainly not help.

Our politicians are dazzled by an abundance of special interest groups like Mr. Henderson's CRIA and the ACCESS Copyright collective, BOTH of whom have begun fake grassroots movements to make it appear as though their agendas have public support.

Typical industry thinking, unfortunately. They put up as many barriers to progress as they can and demand that everybody but themselves shoulder the risk. They set up inevitable failures, and then scream "piracy" when those failures happen, never looking inward at the real problems.

At the end of the day, people just want access to the content they want, in the way they want it. No region locks, no DRM, high quality, reasonably priced (not necessarily free) - it should not be much to ask for.

A shame that after all these years, "pirates" are so often the only ones offering it that way but when they're literally refusing to offer legal alternatives in a workable way, they get to lie in the grave they dug for themselves.

A service that only allows 'streaming' is pretty much worthless to me.

80% of the time, if I'm listening to music, it's in the car. I need digital files without restrictive DRM.

Why isn't there a music service where you pay a monthly fee and just download what you want? That's really the only model that would be useful to me. And yes, I'd pay a monthly fee if I could download MP3/FLAC/WMA audio, but it would have to be at least equivalent to 320K bitrate.

This is a standard MO for the recording industry in several countries. When consumers get fed up and stop buying their product, they blame pirates. When consumers begin taking their entertainment from other, newer sources, they blame pirates. When consumers get tired of the of overplayed homogenous playlists on their radio stations and stop listening, they blame pirates. When new companies and services fold because they can't handle the legal extortion that recording industries get put into law, they blame pirates. When they launch shoddy services that deliver poor value and unappealing service, and those services go under, they blame pirates.

I don't expect anything to change. They'll continue to blame pirates as they relentlessly drive their own market to extinction. It's always been the party line.